DRTV Companies In focus of the FTC

DRTV Companies In Focus of the FTC

drtv-companiesIt seems FTC has a love-hate relationship with DRTV companies and infomercial production. It can sometimes make the jobs of people in these industries difficult and frustrating. None the less, the Federal Trade Commission is there to help keep companies in check with regard to any of their advertising as it may pertain to DRTV, infomercial production, print or otherwise. The FTC does not just monitor specific forms of advertising, such as that of DRTV companies, the FTC is involved in all aspects of marketing and advertising. So what exactly does the FTC do? The FTC’s first role is to encourage competition and protect consumers.  It protects consumers by conducting investigations and suing companies that have done things such as producing unfair or deceptive marketing or been a part of fraudulent activities. The FTC’s second job is to create rules that businesses must follow; if these rules are broken then the FTC may take legal action against the company. Another function of the FTC is educating consumers and businesses about their rights and responsibilities. As for promoting competition, the FTC is the group that enforces antitrust laws. It challenges business methods that could hurt consumers by having: increased prices, poorer quality items and less product selection. It also looks at potential mergers and business practices and takes action if it goes against FTC regulations. The FTC is there to make sure consumers are protected. While the FTC has its benefits and it does benefit consumers, sometimes it can have the opposite effect on those involved in advertising, marketing & DRTV. To begin with, the FTC’s guidelines are changing constantly, so keeping up with them can be a chore, even though these guidelines are there to protect businesses. The FTC has to keep up with the marketing world and as it changes, so do the FTC’s regulations. The following are examples of rules from the FTC: 1. Be transparent 2. Wording should be basic and clear 3. All disclosures should be made evident 4. Avoid distractions that take away from your message or from a disclosure 5. Market to others, as you would want them to market to you Regulations in 2015 With the rise in popularity of social media, the FTC has updated and created regulations in 2015 to deal with this new platform of user-generated content. 1.     Display Endorsers Clearly. If a business has an endorser/s it must be displayed clearly to the public who the endorser is and the relationship between them and the business. 2.     Disclose. Marketers must be as transparent as possible.  A business can never exclude disclosures. 3.     Contests/sweepstakes must add value. If a business is running a contest on social media they must make clear that everyone that participates through social media MUST indicate that the post is in regard to the contest. The company must also make clear how a person can benefit from the contest. direct-response-advertisingWith this new update the FTC may be able to do more than give DRTV companies a slap on the wrist for not adhering to the rules. Be sure to follow all the new guidelines if you don’t want the FTC coming after you. Go to the website ftc.gov for more information. Let’s now discuss how the FTC determines if an ad goes against their guidelines. How is it determined if DRTV companies advertising is considered deceptive? If the ad has information that will mislead customers and/or does not state information that is important to a customer’s decision to buy/use a product, then it is considered deceptive. What are components of an unfair ad? If it is likely a consumer becomes injured unavoidably and if “it is not outweighed by the benefit to consumers”. Consequences of Not Adhering to the FTC 1.     Cease and desist orders can be issued. If the company violates the law again in the future, they will need to pay a fine of $16,000 per day for each ad. 2.     A company can face a civil penalty. Depending on the violation, a civil penalty can be thousands of dollars or even millions. A company may also need to give refunds to people who bought the product. 3.     Corrections for ads. If an ad was released with misinformation or missing information (such as a warning when using the product) a business must take out the ad to correct it and then re-release it. If an ad is deceptive in some way the business must alert the public and correct the misunderstanding. This may all seem very overwhelming but the FTC’s website is a great way to keep up with any updates, additions and changes the organization makes. Another good strategy to stay within regulations is to check what the FTC website states with regard to products or ad claims similar to yours. You may also want to check out the site consumer dot gov. for consumer and business information from the: FTC, FDA, SEC and other federal agencies. The Better Business Bureau also has advice on how to make sure your advertising is truthful. So no matter what segment of advertising you’re in, whether you’re navigating this journey along with us DRTV companies or any other marketing and advertising segment, be sure to keep up with the FTC, as it may save you a bundle.